Which of the Following Statements Is CORRECT

question 139

Multiple Choice

Which of the following statements is CORRECT?

• A) If you have a series of cash flows, each of which is positive, you can solve for I, where the solution value of I causes the PV of the cash flows to equal the cash flow at Time 0.
• B) If you have a series of cash flows, and CF0 is negative but each of the following CFs is positive, you can solve for I, but only if the sum of the undiscounted cash flows exceeds the cost.
• C) To solve for I, one must identify the value of I that causes the PV of the positive CFs to equal the absolute value of the FV of the negative CFs. It is impossible to find the value of I without a computer or financial calculator.
• D) If you solve for I and get a negative number, then you must have made a mistake.
• E) If CF0 is positive and all the other CFs are negative, then you can still solve for I.

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Definitions:

Antitrust Law

Laws protecting commerce from unlawful restraints and anticompetitive practices.

Restraint On Trade

Practices or agreements that restrict free competition and trade, often scrutinized and regulated by law.

Rule Of Reason

A test used to determine whether an anticompetitive agreement constitutes a reasonable restraint on trade. Courts consider such factors as the purpose of the agreement, its effect on competition, and whether less restrictive means could have been used.

Per Se Standard

A principle where an action or condition is considered inherently illegal or wrong, without the need for additional proof.